Productivity and preferences in a small open economy

Chadha, J. S., Janssen, N. and Nolan, C. (2001) Productivity and preferences in a small open economy. Manchester School, 69(s1), pp. 57-80. (doi: 10.1111/1467-9957.69.s1.4)

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Abstract

Following Hall (Journal of Labor Economics, Vol. 15 (1997), pp. S223–S250) it is increasingly common to incorporate preference, as well as productivity, perturbations in calibrated general equilibrium models. We assess the performance of a small open economy stochastic growth model (based on the Blanchard–Yaari framework) under alternative driving processes. Whilst both models provide familiar descriptions of the aggregate economy, we find that the model driven by productivity disturbances has clear advantages in explaining the behaviour towards foreign asset accumulation.

Item Type:Articles
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Nolan, Professor Charles
Authors: Chadha, J. S., Janssen, N., and Nolan, C.
College/School:College of Social Sciences > Adam Smith Business School > Economics
Journal Name:Manchester School
Publisher:John Wiley & Sons Ltd.
ISSN:1463-6786
ISSN (Online):1467-9957

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